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Vol. II.]

Guillon v. Fontain.

[No. 11.

ment againson, J. As far bistrict, to issue writia. Fisher v. Conseloofs

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jurisdiction which the first section of the act of Congress of the 2d of March, A. D. 1867, to establish a uniform system of bankruptcy throughout the United States, confers upon this court, of suits for collection of assets of the bankrupt, enables the assignee in bankruptcy to proceed as plaintiff in such a suit by way of foreign attachment in any case, the demand of the present plaintiff, as appears from his declaration, is not such as to sustain a proceeding by foreign attachment."

The case was then removed to the circuit court upon a writ of error; the assignment of error being the refusal of the court below to grant judgment against the defendant for default of an appearance.

MCKENNON, J. As far back as 1809, at least, it was the practice in the federal courts, in this district, to issue writs of foreign attachment according to the laws of the State of Pennsylvania. Fisher v. Consequa, 2 Wash. C. C. R. 382; and Toland v. Sprague, 12 Pet. 300, are proofs of the existence of this practice. In some, only, of the United States circuits did this practice prevail, while in others its legality was denied. But in Toland v. Sprague a majority of the supreme court held, that, in the courts of the United States, the right to attach property to compel the appearance of persons can be properly used only in cases in which such persons are amenable to the process of the court, in personam. The question was certainly presented in the case, and although it was not necessary to the judgment to decide it, as was held by the four dissenting judges, yet the case must be considered as deciding that the federal courts, under the law as it then stood, had no authority to proceed by foreign attachment, as it was regulated by the laws of Pennsylvania.

But, doubtless, in view of this decision, the act of Congress of June 6, 1872, greatly enlarges the authority of the federal courts in the employment of remedies. By the sixth section of that act, Rev. Stat. sec. 915, it is enacted that “in common law causes in the circuit and district courts the plaintiff shall be entitled to similar remedies, by attachment or other process against the property of the defendant, which are now provided by the laws of the state in which such court is held for the courts thereof."

The federal courts in this state are thus invested with undoubted authority to proceed against non-resident persons by attachment of their property, as may be done by the laws of the state.

Was the plaintiff, then, entitled to an allowance of his motion for judgment against the defendant for default of appearance? It was denied by the court below, for the reason that the cause of action, as appears from the declaration, would not support a proceeding by foreign attachment.

The action is debt, and the declaration avers that a limited partnership was formed between Charles Vezin and the defendant, to the capital of which the defendant contributed $50,000 as a special partner; that during the continuance of the term, at certain times stated, the defendant withdrew from the capital contributed by him specific sums of money, as and in the name of interest on the said capital, whereby the original capital was reduced by the amount so received by him ; and the demand is to recover from the defendant these several sums as received by him in violation of law.

The suit is brought to enforce a statutory liability claimed to be imposed upon the special partner, under the circumstances stated in the Vol. II.)

KIMBALL v. MILFORD.

[No. 11.

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declaration. By the statute (Brightly's Purdon, 937) it is enacted “ that if it shall appear that by the payment of interest or profits to any special partner the original capital has been reduced, the partner receiving the same shall be bound to restore the amount necessary to make good his share of capital with interest." The liability to restore is complete, if the payments to a special partner reduces the capital, and he may be compelled to repay the deficiency in his share of the capital thus caused by an appropriate action.

Is a foreign attachment then an allowable method in Pennsylvania of commencing such action ?

Any demand arising ex contractu which is susceptible of ascertainment by a definite standard may be the foundation of a foreign attachment. In Strock v. Little, 9 Wr. 418, Mr Justice Woodward, says : “ Under our statutes, which being remedial, are to be liberally construed, foreign attachments may issue in all actions sounding in contract, where the plaintiff can swear to the amount claimed, or the court, upon a rule to show cause of action, can get at the sum in controversy with sufficient accuracy to fix the amount of bail which the defendant is to give to dissolve the attachment.” This is the settled construction of the Pennsylvania statutes, and the demand in this case is fully within it. It is a determinate and certain sum, received under circumstances stated in the declaration, which imposed upon the defendant a statutory obligation to repay it, and for the recovery of which an action ex contractu is the appropriate remedy.

The motion of the plaintiff in error for judgment for default of appearance by the defendant ought, therefore, to have been granted, and the cause is remanded to the district court, with directions to allow said motion and to enter judgment accordingly.

SUPREME COURT OF NEW HAMPSHIRE.

(To appear in 54 N. H.)

DOUBLE TAXATION. - RAILROAD.

KIMBALL v. MILFORD.

If a railroad corporation, situated in another state, pays a specific tax upon all its capi

tal invested or expended, whether represented by capital stock or indebtedness of the corporation, and such taxation is declared to be in lieu of all state, county, township, or other taxes in that state, and it appears that such specific tax was intended to be a fair equivalent for the taxes that would otherwise be laid on such property by the ordinary means of taxation, such property should not again be taxed in this state to the owners of shares of the capital stock of such corporation.

PETITION for abatement of tax, by John Kimball, against the town of Milford. The petitioner resided in said town April 1, 1873, and owned ten shares of the capital stock of the Michigan Central Railroad, a corporation created by the laws of Michigan, and with its railroad wholly located in that state. The selectmen of Milford assessed a tax of $15.50 Vol. II.)

KIMBALL v. MILFORD.

[No. 11.

G. Y. Sawyras incorporated sec. 33 of 1

on said shares against the petitioner as of that day. The petitioner offers to prove that he in all respects complied with the laws in respect to giving in his invoice of taxable property for that year, duly applied to said selectmen to abate, said tax on the ground that the shares were not liable to taxation here, and informed them that they were subject to taxation, and were taxed for that year, in Michigan, under the laws of that state. The selectmen refused to make the abatement, and therefore this petition was filed. A tax was assessed upon said shares against the corporation for said year, and paid, in conformity with the provisions of the charter of said corporation, approved March 28, 1846, and of the Compiled Laws of Michigan, vol. 1, ch. 22, being ch. 21 of the Revised Statutes of Michigan of 1846, and no tax in any other form was assessed on the shares in that state. Either party may refer to the provisions of the charter, and of the Constitution and laws of Michigan bearing upon the question arising upon said petition. The petition is to be dismissed, or the tax abated, or other order made, according to the opinion of the court upon the foregoing facts. Case reserved.

G. Y. Sawyer & Sawyer, Jr., for the petitioner. The Michigan Central Railroad was incorporated by act of the legislature of that state, approved March 28, 1846 ; and sec. 33 of its charter declares that the corporation, " after February 1, 1851, shall pay to the state an annual tax of three fourths of one per cent. upon its capital stock paid in, including the two millions of purchase money paid to the state, and also upon all loans made to said company for the purpose of constructing its road, or purchasing, constructing, chartering, or hiring steamboats, .... and the property and effects of said company, whether real, personal, or mixed, shall, in consideration thereof, be exempt from all and any tax, charge, or exaction, by virtue of any law of this state, now or hereafter to be in force, except penalties by this act imposed.” In sec. 39 the right is reserved to the state to alter, amend, or repeal the charter, at any time after thirty years from its passage, by a vote of two thirds of each branch of the legislature.

This mode of taxing railroad property by specific tax on the capital paid in, whether represented by the shares or the debts of the corporation, was adopted in Michigan, by Act of 1855, Comp. Stats. of Michigan of 1872, ch. 75, p. 744, for all railroad and certain other corporations with a similar exemption from other taxation. The Constitution of Michigan recognizes and authorizes the distinction in taxation between the general mass of property to be subjected to a uniform rate of assessment and a specific tax, in lieu of all other, upon the property of banking, railroad, plank-road, and other corporations. Thus, art. 14, sec. 1, prescribes the way in which specific taxes shall be applied ; sec. 10 authorizes the collection of specific taxes accruing under existing laws, and empowers the legislature to make provision for the collection of specific taxes from railroad and other corporations created after the adoption of the Constitution; and sec. 11 declares that the legislature shall provide a uniform rate of taxation “except on property paying specific taxes." And the legislature have provided such uniform rate (Comp. Stats. title 8, p. 359), by enacting, ch. 21, sec. 1, that all property, real and personal, not expressly exempted, shall be subject to taxation; sec. 14, that inventories Vol. II.]

KIMBALL v. MILFORD.

(No. 11.

be taken upon which the taxes are to be assessed ; sec. 15, that the inventories shall set forth, under fourteen different heads, the various classes of personal property; and sec. 17, that the shares of any corporation required to pay a specific tax shall not be included in the inventory. It is clear, we submit, that this specific tax is regarded, under the legislation in Michigan, as a tax on the shares to the owner; and, at the rate of three fourths of one per cent. on all moneys invested in the railroad, regardless of depreciation and fluctuations in the market value of the stock, is at least equal to the average rate of taxation on property generally in this state from 1851 to 1863.

Such a tax of one per cent. on deposits in savings banks, established in 1869 as the fixed policy of this state, even under the present burdensome taxation, is under our legislation regarded as a fair and full tax on the deposit as money at interest. In fixing the per cent. for such certain tax on the whole amount invested for a series of years, to make it as near as may be uniform with the rate at which the general mass of property is taxed, sound policy would seem to dictate that the probable depreciation and prospective fluctuations in the market value of the property should be considered. Notwithstanding the slight uncertainty which the corruption of the times, creeping here and there into the management of savings institutions, may have thrown upon the market value of savings banks deposits, it is surely safe to claim that they are more stable in character, subject to less of fluctuation and uncertainty, and of higher value, on the whole, in the market, in proportion to their par value, than railroad stocks; and that a certain fixed tax of three fourths of one per cent. for a series of years, on the entire amount expended in the construction of railroads, is a higher rate of taxation, in comparison with an ad valorem tax on the same property, than is one per cent. on the amount deposited in savings banks in comparison with a tax assessed according to its market value. The settled policy of Michigan, for more than twenty years, has been to tax the money invested in railroad and certain other corporations at a fixed and definite rate. It must be assumed that three fourths of one per cent. for the twenty-four years that taxation at that rate upon the whole money expended in this railroad has been imposed upon it, is a fair and full equivalent for a tax upon its appraised value from year to year. The mere accident of the temporary increase of the rate of taxation, by reason of war expenses, ought not to be permitted to enter into the account.

The settled policy of this state is to tax railroad and manufacturing shares, and deposits in savings banks, directly to the corporation, and in case of savings banks, by a specific tax at a fixed and certain rate, year after year, precisely as in the case of railroad shares in Michigan. Under our Constitution, which requires all taxes to be proportionate upon all inhabitants and estates, such tax can be justified only upon the ground that the rate renders it a fair and full tax in proportion to that on the general mass of property. It is quite evident that our legislature did not deem the advanced rate at which the general mass must necessarily be assessed by reason of the temporary burdens left by the rebellion, as a proper element of computation in adjusting the fixed rate for deposits. Here, then, we have, as in Michigan, two modes of taxation; one upon

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Vol. II.)

KIMBALL v. MILFORD.

[No. 11.

the mass of property at its valuation, the other upon certain property at a fixed and definite rate, which in our case, at one per cent. on deposits during the six years past, when property here has been excessively burdened by the necessity for extraordinary taxation, is nevertheless a fair equivalent for a tax ad valorem. On what ground can it be said that the three fourths of one per cent., as the rate of taxation for railroad property in Michigan, is not, for the twenty-four years that this corporation has been so taxed, a fair and full equivalent for an ad valorem tax on its

operty for the that this tax soaps the petitioneral Lause of se We can assessment and those terms his clause is meie korce when the

We contend that this tax so assessed in Michigan against the corporation is an assessment and tax “ to the petitioner by the town where the corporation is located,” as those terms in the third clause of sec. 5, ch. 49, Gen. Stats., are to be understood. This clause is merely a reënactment of sec. 1, ch. 1419, of the Laws of 1853, which was in force when the General Statutes were adopted. In the original act the language is: “All bank, railroad, and other stock in corporations located out of the state shall be taxed, when owned by citizens of the state, which is not taxed to the owners by the towns or cities where the corporations are located.” In the Gen. Stats. more briefly : “Stock in corporations located out of the state owned by persons living in the state," &c. The original act mentions specifically “ bank, railroad, and other corporations,” such as manufacturing corporations, which, as well as banks, have a fixed location in some town or city. In its application to railroad corporations, the word town or city, as used in the statute, is to be construed place incorporated, or whose inhabitants are required to pay any tax." Gen. Stats. ch. 1, sec. 5. So construed, it means the State of Michigan as the place whose inhabitants are required to pay a tax, and in which the subject matter referred to — the Michigan Central Railroad - is located. The same provision in respect to the construction to be given to the word “ town” or "city" was contained in the Revised Statutes, and was in force in 1853, when the original act, ch. 1419, was passed. This third clause, in its application to this case, is to be read as declaring in hæc verba : “ Stock in the Michigan Central Railroad owned here is to be taxed here, if not taxed by the State of Michigan."

So, too, the tax is one“ to the owner” and “on his stock," as those terms in the third clause are to be understood. The phrase “taxed to the owner,” as here used, cannot mean a tax assessed in Michigan against the owner here, in the sense of a tax to him as a citizen of that state, for which his body could be arrested or his chattels distrained. Such a tax would be a nullity, because he is not within the jurisdiction to be taxed there personally. It must therefore mean a tax, the burden of which is to rest upon him or his property, — in effect, a charge upon his shares, and in that sense a tax to him and upon the shares. By sec. 7, ch. 49, Gen. Stats., it is declared that “no statute provision shall be so construed as to subject any stock to double taxation." This provision was first enacted in the Act of 1853, ch. 1419, with special reference to the provision contained in the first section for taxing shares in foreign corporations owned here, the second section providing that “neither this act” nor other laws of the state should be so construed. To tax the whole corporate property to the corporation, and then the whole of the shares to

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